Demand for UK manufactured goods remains very weak, but is less depressed than it has been for much of 2009, and over the next three months firms expect output to grow slightly, the CBI said today.
Responding to the CBI's latest monthly Industrial Trends Survey, 27% of manufacturers anticipate a higher volume of output over the next three months, while 23% said it would fall. The balance of +4% marks the second consecutive month where marginal output growth is expected.
A balance of 45% of firms said total order book levels were below normal, which was a slight improvement on October (-51%), and the least negative since December 2008 (-35%).
Export order book levels were weak, with a balance of 37% reporting them to be below normal. This slight improvement on October (-46%) may reflect greater interest in UK exports because of weakened Sterling.
Ian McCafferty, CBI Chief Economic Adviser, said:
"Manufacturers have had another testing month, though conditions are not quite as bleak as they have been for much of 2009. The weaker pound has softened the blow for exports, but the ongoing lack of demand for manufactured goods reconfirms that any recovery will be anaemic and slow. Expectations of marginal growth in output in the coming months are encouraging, but rising stock levels leave a question mark over the strength of demand."
Stock adequacy increased in November, with a balance of 20% of firms reporting levels more than sufficient to meet demand. This was largely due to higher stock levels among capital goods producers, who are the most pessimistic about output over the coming three months.
Manufacturers are also expecting domestic prices to fall very slightly over the next three months, and the balance of 7% expecting a fall is similar to October (-5%).
1. A balance is the difference between the percentage of manufacturers reporting an increase and those reporting a decrease.
2. The November 2009 CBI Industrial Trends Survey was conducted between 27th October and 11th November. 470 manufacturers took part.
3. During the survey period the pound averaged euro 1.11 and $1.65, while Brent Crude averaged $77.48 per barrel, compared with euro 1.09 and $1.60 and $67.16 per barrel in the October survey period.
4. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.